Wednesday, March 01, 2006

Kiwisaver

"Good in principle," says National Finance spokesman John Key on Radio Live this morning describing Cullen's Kiwisaver. Key's only stated objections are "he has doubts about the number of employees who will choose to stay in the scheme," and "you can still move your money in and out of your account."

Sounds like he doesn't really have an objection. After all, he has no objection "in principle" to a government-run savings scheme. He's just unhappy it's not him bringing in the scheme.

This much of what Key said is almost true: "The fundamental problem is that Kiwis don't save enough because they don't earn enough." It's almost true: Kiwis don't save enough -- not because they don't earn enough, but because theydon't take home enough. If you want people to save, and NZ certainly needs the capital, then just stop taxing them over forty-percent of their income so that there's something left from their pay packet to save!

You don't need fancy government schemes in which taxpayers get back some small amount of their own money from the government. You just need to let people keep their own money in the first place. Ending tax on all interest-earning accounts might be a start, eh?

No, they haven't. Key's comment "nothing wrong in principle" brought to mind Bill English's earlier comment on the bloody Cullen Fund that he had "no problem in principle" with it. Quite apart from the obvious fact that neither Key nor English have any principles, English's comment showed how far National had slipped in thirty-odd years, as I said here: Bring on the Dancing Cossacks.

Yalnikim - If they were told that there'd be no pension because they were being taxed less, would they save more (to say nothing of their screaming for nanny?)

Key worked for an investment bank. He's quite young. Should he not demonstrate the parliamentary-sticking power of Jonathan Hunt it's likely he'll end up working at an IB again.

The financial institutions (particularly the funds managers and private equity houses) lent their support to compulsory super schemes in Australia (thereby artificially creating work and capital for themselves). Taking your money out of a fund makes things difficult for funds managers, forcing them to hold cash, reducing the return they're measured on. It's worse for private equity firms who have to wonder when their spare capital will be called for. Anyone wonder why Key wants the controls on taking your money out increased?

yalnikim: 'I have faith that you, I and most of the other people who read this site would actually save more if we were taxed less, but the other 3.9 million .. I have little faith, if any.'

But Y, that's exactly the point we make regarding freedom. It's your choice. Example: make provision for your retirement, or live it up and spend it all - and face the sorry consequences later on.

Give the option, most people will choose to swim rather than sink. The latter will always exist to some extent, but in far fewer numbers due to having been raised with the philosophy of personal responsibility.

In other words, there will be fewer casualties in all the right stats: health, education, welfare & crime.

It is not for others, ie the state, to know what is best for the individual. PC & AB are correct. Give me my bloody money back. I'll take my chances, thanks.

Sus, I would like to say you have to be joking but, unfortunately, I know you're not. Have you heard of the industrial revolution? Do you know what it would have been like to be living then? I suggest you read up on some social history and then think a little deeper about what your "free" society might be like.

Yalnikim, you surely have to be joking? Have you heard of the industrial revolution and what life was like before it? Do you know what it would have been like to be living then? Fortunately, I've done some research for you.

PC - I have no illusion that life was anything but utterly miserable back then. And I have no desire to head back to that way of life. However, what I'm talking about are the social reforms that had to take place after the industrial revolution in order to enable society to keep pace with private enterprise (e.g. various labour laws, state housing assistance etc).

Comments on this post

PC: '... that's almost true: Kiwis don't save enough - not because they don't earn enough, but because they don't take home enough.'

There's no 'almost true' about it. Of course we're taxed to buggery. Key, in this pronouncement, shows his true socialist colours in his ignorance of the burden, the dead weight, that is tax.

I recall his agreeing with Cullen in a three-way discussion with Leighton Smith on the latter's prog prior to last year's election 'that GST was a fair method of taxation'.

The Nats have changed? Bugger off. They haven't got a clue."The Nats have changed? Bugger off. They haven't got a clue."

No, they haven't. Key's comment "nothing wrong in principle" brought to mind Bill English's earlier comment on the bloody Cullen Fund that he had "no problem in principle" with it. Quite apart from the obvious fact that neither Key nor English have any principles, English's comment showed how far National had slipped in thirty-odd years, as I said here: Bring on the Dancing Cossacks.
I'm sure that people will save more when you tax them less. Not!!!

They'll just spend it on bigger cars, a new jetski, their new toll roads, health insurance, "security" (which very well may be a payment to the local gang), etc etc...

At least, that way, we will achieve more of the "growth" that everyone so desperately seems to think makes the world a better place.

I have faith that you, I and most of the other people that read this site would actually save more if we paid no taxes. As for the other 3.9 million.... I have little faith, if any.
Yalnikim - If they were told that there'd be no pension because they were being taxed less, would they save more (to say nothing of their screaming for nanny?)

Key worked for an investment bank. He's quite young. Should he not demonstrate the parliamentary-sticking power of Jonathan Hunt it's likely he'll end up working at an IB again.

The financial institutions (particularly the funds managers and private equity houses) lent their support to compulsory super schemes in Australia (thereby artificially creating work and capital for themselves). Taking your money out of a fund makes things difficult for funds managers, forcing them to hold cash, reducing the return they're measured on. It's worse for private equity firms who have to wonder when their spare capital will be called for. Anyone wonder why Key wants the controls on taking your money out increased?
yalnikim: 'I have faith that you, I and most of the other people who read this site would actually save more if we were taxed less, but the other 3.9 million .. I have little faith, if any.'

But Y, that's exactly the point we make regarding freedom. It's your choice. Example: make provision for your retirement, or live it up and spend it all - and face the sorry consequences later on.

Give the option, most people will choose to swim rather than sink. The latter will always exist to some extent, but in far fewer numbers due to having been raised with the philosophy of personal responsibility.

In other words, there will be fewer casualties in all the right stats: health, education, welfare & crime.

It is not for others, ie the state, to know what is best for the individual. PC & AB are correct. Give me my bloody money back. I'll take my chances, thanks.
Sus, I would like to say you have to be joking but, unfortunately, I know you're not. Have you heard of the industrial revolution? Do you know what it would have been like to be living then? I suggest you read up on some social history and then think a little deeper about what your "free" society might be like.
Yalnikim, you surely have to be joking? Have you heard of the industrial revolution and what life was like before it? Do you know what it would have been like to be living then? Fortunately, I've done some research for you.
PC - I have no illusion that life was anything but utterly miserable back then. And I have no desire to head back to that way of life. However, what I'm talking about are the social reforms that had to take place after the industrial revolution in order to enable society to keep pace with private enterprise (e.g. various labour laws, state housing assistance etc).

It is easy to research "facts" that back up your own point of view.
ps. I actually agree, in the main, with your comments. I don't want to pay taxes either. Rather than complaining about my lack of freedom, I've discovered many ways to lessen the IRD's load...